Merkel doubts deal can be done

We were long told that this long-term budget would be a moment seized to modernise the EU budget, to make sure it did growth-focused work that the national governments or private sector wouldn’t do on their own. It would be moment to challenge the Common Agriculture Policy subsidies, as The Economist’s Charlemagne column points out this week, a throwback to war-time reparations and a lost world. Even the European Commission first draft budget didn’t take on the CAP fundamentally, and in the late night haggling it’s pulled back from the comparatively modest squeeze it was proposing.

We won’t know for a while whether these talks are being abandoned. The UK is still saying that the overall total hasn’t come down enough, it’s also double-checking that the rebate is untouched in the latest proposals.

One source accused David Cameron of just going on about “my rebate” last night. If this summit fails and stumps are pulled for a return next spring it’ll probably be Germany that, as so often, makes the call. This budget summit doesn’t rate that high on Angela Merkel’s “to do” list. Angela Merkel doesn’t want anything complicating the more immediate and painful challenge on her plate: the IMF call for the EU to say “auf wiedersehen” to billions of money loaned to Greece (£).

On Wednesday in the Bundestag, Chancellor Merkel got a taste of the fire that could be turned on her over Greece as her opponent in the general election next year, the SPD’s Peer Steinbruck, gave a fiery speech warning her not to deceive Germans with funny numbers on bail-outs. Greece was the focus for a chunk of her bi-lateral with President Hollande last night and it is the big topic of the next few weeks. (Although banking union is on the agenda for the December summit back here in Brussels, the whole tenor of the last gander round that course at the EU Summit in October was that Chancellor Merkel was pushing detailed work down the pipe, well into the second half of next year.)

In the budget spat between EU Commission President Jose Manuel Barosso and David Cameron over Mr Barosso’s administration costs Mr Barosso appears to have won on paper: the latest proposals do not chip away at admin costs. Mr Cameron will feel that he scored a political victory taking aim at Brussels perks to help him make his broader point that when countries are cutting overheads so should Brussels.